Owner Liabilities Exposed without Professional Strata Management

“Why do strata title dwelling owners, after putting all that money into their property, go off and pay someone else to run everything for them when they could just as easily do it themselves!” Well, if you have to ask that question you obviously don’t know that it isn’t at all easy to manage a strata title and you’ll soon see why.

Firstly, there are all kinds of obligations imposed by state legislation, which makes sense when you consider that this is a type of communal living arrangement, and the rights of every person in it must be protected. Also, getting a group of people from all different backgrounds and circumstances to agree on everything one hundred percent of the time is impossible. Just look at our parliaments!

Secondly, to comply with all the requirements of legislation requires an immense body of knowledge to manage what is a complex process. Strata title administration needs to be performed by someone suitably experienced, as any lapse in detail could expose the owners to severe financial penalties and loss. It is not a role for an amateur, however well-meaning they are.

Handing the headaches and hassles over to a strata Western Australia company that is expert in WA strata title management is the answer. WA Strata Management will perform all aspects of regular strata management and body corporate services, and are also able to perform special services where they have been directed by the strata Council. This includes all financial management, administration of the Strata Titles Act and building maintenance, essential to protect and increase the value of the overall investment on behalf of the owners.

“I am an absentee owner of a strata unit in a large complex with both owners-in-residence and tenants occupying the building. I know little about the legislation, but I am aware of the liabilities that I carry should all statutory requirements not be met. Since the Council engaged WA Strata Management to look after everything, there have been fewer petty disputes, monies are being accounted for and a regular maintenance program is in place. I can thoroughly recommend WA Strata Management to improve every aspect of administration and I now feel that my investment is being protected,” said Clive P.

Just keeping the financial aspect of a large complex under control is a major role and requires people skilled and experienced in using computer accounting packages, setting up control systems and procedures and understanding the reporting required by legislation and how it should be presented to the Council and owners. It includes collecting and banking money, processing accounts receivable and accounts payable, following up bad debts, preparing budgets, calculating levy contributions, preparing annual accounts and arranging external audits.

“We had a couple of the owners trying to look after the accounts but it just became too big a job. When we missed paying our public liability insurance on time, it was clear that we needed professional management. WA Strata Management was recommended by a friend who lived in another unit block, and we really haven’t looked back. Their people are skilled, experienced and have set up some great systems to keep track of everything. Excellent move and highly recommended to other unit owners,” said Mel F.

This sector of the real property Australia market continues to expand on the back of demand by households for an alternative to the traditional quarter-acre suburban block. Legislation and regulations will be poked, prodded and tweaked in response to issues and the role of the professional strata manager will become essential to good order and financial control. To keep your complex ahead of the pack, contact WA Strata Management to see what they can offer. You won’t be sorry.

Rules and Enforcement – the Answer to Problem Pool Behaviour

There are a number of benefits of living in a gated estate that makes them attractive to a wide demographic. Security is high on the list, having people in close proximity is a plus for extroverts, and the ability to share in the use of the communal facilities, without having to physically maintain them, is a major attraction. However, having the use of the communal facilities is not without its challenges, and disputes often arise unless there are clear and enforceable rules about access, behaviour and appropriateness of use. The other contentious issue that needs to be clearly explained is how the authority to manage these facilities is devolved.

The Council or body corporate is the entity with the authority to make rules and provide guidelines so that every resident has the expectation of “quiet enjoyment” of their dwelling. This is particularly important in shared and gated communities because of the number of people living in close proximity to each other. Many Councils employ professional strata management agencies to undertake the daily operational managementof their complexes, so while they have set down the rules, it may fall to the strata manager to enforce them.

Out of all the facilities offered by strata titled communities, communal swimming pools are the most contentious. There are three issues that cause most of the problems. The first is the differing expectations of use and behaviour arising from the age range of the residents. What is acceptable to a group of teenagers will most likely not suit retirees, for example. Second, if the majority of dwellings within the complex are not “owner occupied” e.g. holiday rentals, there is a continual flow of people unfamiliar with the rules using the pool. The third occurs because there is no clear signage setting out the acceptable uses of the pool.

The signage should come first, because it draws a line in the sand. It should show clearly what is not acceptable, and be signed under authority of the Council or body corporate. Once that is in place, it should just be a matter of informing everyone using the pool that these are the rules. The most important rule concerns the safety of young children and most Councils prohibit the use of the pool unless they are under adult supervision. Along the same lines, banning any glass inside the pool fence is a common rule for obvious reasons, as is the consumption of alcohol.

The hours of operation of the pool are another area which can give rise to disputes. People living in the complex who do shiftwork, for example, are not going to be happy with excessive noise if they are trying to sleep during the day. However, their needs must be balanced with the right of others to enjoy the pool, so banning noise through the day is not an acceptable solution. Cool heads and sensible negotiations are the answer to issues such as these.

Every problem has a solution if there is goodwill involved and the standard of behaviour around swimming pools is no exception. With clear rules and expectations from the Council, and a system to admonish those with flagrant disregard for the rights of others, everyone should be able to enjoy a swim in peace.

Strata Management – A Growing Industry

As the home unit sector of the real property market continues to expand to meet the demand for small lot living, more and more residents are living under a strata management arrangement. This is defined as a situation where there are multiple units or apartments on a single block of land, each independently owned, but subject to legislative requirements to manage common areas on behalf of all owners. The obligations imposed by state legislation are there to protect the rights of every person in the complex and this includes tenants as well as owners.

To comply with all the requirements of legislation requires a thorough knowledge of a complex process. Strata management should be performed only by someone with this knowledge as well as having considerable experience. Without this attention to detail, the owners could be exposed to severe financial penalties and loss of property.

What is Involved in Strata Management?

A strata company is registered at the start of the building process. When people buy a lot, that is, a unit in a building, they automatically become members of the strata company which then elects a Council or body corporate to act on their collective behalf. The lot owners have unlimited liability for losses or debts of the strata company, but most of them as individuals are not part of the operational management of the complex.

With so much at stake, proper management is vital to the financial well-being of all owners. Professional strata management companies have been set up to perform the operational management of these legal entities, in exchange for a negotiated fee. The Council chooses the strata management company that will look after the interests of the owners, a responsibility not taken lightly due to the level of compliance with state legislation that is required.

These strata management companies employ professional managers who have made a career out of maintaining good order and financial control over the affairs of strata properties. They keep the financial aspects under control, arrange and supervise building maintenance and typically have skills in business administration and management. They also understand the reporting required by legislation and how it should be presented to the Council and owners.

What About Customer Service?

Strata management is also a customer service industry. With many buildings now housing hundreds of people in one complex, the strata manager should also be experienced in juggling competing priorities, preferably with a smile. The last thing Councils need is complaints from occupants about the behaviour or attitude of their building manager.

The Council should ensure that the strata management company they choose has a solid track record in understanding their clients and being able to deliver the services they require. The property owners have placed their trust in the Council to manage their collective risks and responsibilities. The selection of a strata management company is one of the most important decisions the Council will make.

 

Financial Controls Essential for Sound Management

The management of a strata company is not much different from the management of a business. They both need to operate within the parameters of legislation and they both require sound operating procedures and skilled staff to provide a service. Most importantly, they both need to keep detailed and accurate accountingrecords to control costs, report on the financial state of the company and lodge tax and corporate returns with government agencies. In this respect, a strata company is a business. Its structure is different so it is not subject to Australian Corporation’s laws, but it is a legal entity carrying on an enterprise and is subject to Australian tax laws.

Some flexibility in the presentation of financial reporting data is acceptable as some strata companies have specific presentation requirements. However, most strata companies require financial systems and reporting methods to follow standard accounting conventions and protocols. From the point of view of the individual members, the most important issue in the management of their assets is ensuring sound financial control over their investments.

What are the Most Important Reports?

Regardless of the way they are presented, the strata company Council would be expecting to see certain reports on a regular basis, most of which are required by legislation. The most important document is the Annual Statement of Accounts that is required each financial year, which would typically be presented as an Income Statement (or Profit and Loss) and a Balance Sheet.

The Income Statement, as its name suggests, reports all the income and expenditure for the financial year and shows the profit or loss made in that year. The Balance Sheet reports on the assets held by the strata company and the liabilities attributed to it. The members of the strata company must know if the value of their assets is sufficient to cover the liabilities incurred, should the company be liquidated.

When Professional Assistance is Needed

The level of complexity involved in producing these reports has seen most strata companies seek professional assistance to manage their finances. This is the role of a professional strata management company or agency. Experienced strata managers act in the same capacity as the manager of a public or private company. As such, they are experienced in running the management systems that ensure sound financial control of income and expenditure.

Successful businesses and companies rely on their budgets to control costs and identify problem areas, and strata companies are no different. An annual budget of estimated expenditure from the administrative fund for the following year must be presented to the Council. They also require a provision for likely future costs from the reserve fund. Both these reports are used to prepare a funding proposal for the levying of contributions to both these funds for the coming year.

Once the budget has been approved, it is the driving document for all expenditure for the coming year. It allows the strata manager to make decisions and arrange items such as maintenance, provided they have been approved in the budget. Budgets are a proven financial tool that delivers management the operational control necessary to get things done, but allows the Council to retain financial control.

Strata management companies handle all the administrative, financial and management responsibilities of the Council and the daily operation of the building complex. The reporting mechanisms allow the Council to be fully informed, but not have the pressure of managing everything themselves. For more information about strata management, click here.

Strata Management – A Vital Cog in the Strata Wheel

Strata title arrangements are unique in the ownership of property and have been developed over time as a result of the demand for small lot housing. Duplexes, unit developments and apartment buildings have changed the way households live in Australia. Increasing numbers of people want to live in dwellings where they share common property and hand the responsibility for the daily operation and maintenance of their property to a strata manager.

Strata Title – a Very Brief Description

When people buy into a strata property, they each effectively become a type of shareholder in the management of the whole building or complex. Their ownership automatically gives them rights and responsibilities under the law governing strata properties. These laws differ slightly from state to state, and some of the terminology is slightly different, but the concept is the same. They own their unit or apartment, and a proportion of the common property, which includes the outside walls, balconies, driveways, fences, recreational facilities and any other parts of the property that were designated as such when the original building plan was registered.

The owners collectively form a strata company and elect a Council made up of fellow owners. The Council’s responsibilities are similar to those of company directors, with similar authority and accountability to the rest of the owners. Council members don’t necessarily have the time, skills or even the desire to perform the operational duties required and therefore, they engage the services of a strata management company to look after everything on their behalf.

Where Do Strata Management Companies Fit In?

Strata management companies have grown rapidly to assist strata companies manage their facilities and ensure all legislative requirements are being covered by the Council. Some companies do this better than others, and productive strata management provides the strata company with access to professionals who, on their behalf, will perform the procedural and administration duties required by law. WA Strata Management is an experienced, professional company operating since 1991 and providing strata management services for residential and commercial properties.

WA Strata Management employs experienced managers with up-to-date knowledge of relevant legislation and the administrative, financial and organisation skills to effectively manage large complexes. Their roles are challenging as they juggle sometimes with competing interests between owner/occupiers, absentee owners, tenants, council members and visitors to the property. A competent manager makes sure regular maintenance is carried out, by-laws are observed, facilities are clean and generally contributes to the overall enjoyment of the property by everyone involved.

In addition, the manager ensures that the day-to-day financial and administrative tasks required to effectively manage a large facility are competently performed, compiles reports for Council meetings and is a centralised point of communication. They are also able to outsource services such as repairs and maintenance and arrange for any other goods and services required for the sound management of the common areas.

Strata management is a complex process covered by legislation and if not conducted properly, exposes the individual lot owners to considerable liability, and personal financial loss. The fine details of these arrangements are explained on WA Strata Management’s website, where there is a number of publications available for download at www.wastrata.com.

Strata Manager – The Ultimate Multi-Tasking Occupation

People choose occupations for a variety of reasons, usually related to their level of interest in a particular vocational area and their aptitude for gaining the necessary skills. For many people, one of the overriding factors that steer them in a particular direction is the level of engagement they must have with the general public in a typical working day.

Some occupations lend themselves to working closely with people much more than others. Retail, sales, health care, business and personal services are just some of the industries where communication skills and the enjoyment of interacting with others are major draw cards. People who would rather be supervised and in isolation do not typically choose these types of jobs.

Strata Management not a Suitable Role for Anti-Social People

A vocation they would never even consider is strata management and, in particular, the role of a strata manager. This role would be immensely challenging for a person who could happily work for days without consulting or conversing with another person. While they may be technically competent to perform the financial and administration tasks required, the necessity to engage daily with owners, suppliers, service providers and tenants, amongst others, would place them under considerable stress.

Obviously then, a successful strata manager is one who enjoys a busy and varied day with lots of people contact. They thrive on solving problems, diffusing issues, making decisions, exercising leadership and using and enhancing their communication and negotiation skills. Of course there are many other skills that are required other than the ability to get along with people. However, having the customer as the focus of their activity and treating them accordingly is the grease that keeps the wheels moving.

How many Skill Sets does a Strata Manager Require?

An effective strata manager must also have a range of technical skills. Financial management is one of the most important areas of responsibility. A good strata manager has the financial systems in place to ensure that all accounting conventions are followed, all transactions have a clear audit trail and financial reports are available on time for the Council. They should also have a sound understanding of the legislation around strata titles and the ability to keep this knowledge up to date.

The strata manager must also have sound business administration skills or the ability to supervise staff with those skills. Records must be kept for taxation and reporting purposes, invoices should be paid on time, employees paid according to relevant industrial arrangements and PAYG tax remitted to the ATO. Telephone queries need to be handled professionally, unit bookings made in complexes where there is a high proportion of tenants, and business systems managed and maintained to account for and report on all this activity.

Essentially, a strata manager of a large complex is similar to the manager of a small business, and should have the same skill sets. Getting the right combination of people and technical skills is a challenge, but once the right combination is found, the role, while always challenging, is stimulating for the person who wants to work in close contact with other people. Further information about working as a strata manager is available at………. This could just be the perfect career opportunity for the right person.

New Residents in Strata Communities Need to Know By-laws

When people buy into or rent a unit under a strata title arrangement, it is a wise move to fully understand the concept and any restrictions it may place on lifestyle choices, before any contracts are signed. The very nature of strata title developments brings people in close proximity to each other in their living arrangements. It becomes very uncomfortable when situations arise that place harmonious neighbour relationships in jeopardy, especially if these situations result in legal action.

A quick summary of strata title starts with the understanding that from the moment the building plan is registered, there is legislation, regulations and, from the body corporate, by-laws that need to be observed. Basically, the owner of a lot, that is, a dwelling that can include designated parking spaces, has control over their lot, apart from common areas. These typically include stairwells, driveways, recreational areas such as a pool or tennis court, lawns and gardens outside their lot and other areas managed by the body corporate.

Enforcing By-laws Not the Role of Professional Management

Many bodies corporate or Councils as they are referred to in some states, engage professional strata management companies to look after their operational responsibilities. WA Strata Management specialises in providing these services across Western Australia for residential and commercial strata schemes. While professional strata managers have a wide range of duties to perform on behalf of the Council, enforcing their by-laws is not one of them.

This is where it is important to know and understand the by-laws for the particular building where a person is going to live. A good example of the problems this lack of knowledge can cause is also one of the most common issues that end up in the courts. A by-law may state quite firmly that no pets of any description are allowed to be kept by occupiers without written permission of the body corporate or Council. If a person doesn’t know, or ignores this by-law, and brings home a dog or cat, for example, a notice to remove the pet will most likely be issued.

Proactive Councils Could Limit By-law Breaches

Naturally, this is the kind of situation that evokes strong opinions and emotions for all quarters, and can result in friendships with neighbours ending in bitterness. For the Council representing all the owners, it can also result in considerable cost if the pet owners decide to dig in their heels and ignore the notice. The end result is that owners who do not want pets in the complex are incurring legal costs to defend their position.

With increasing numbers of these types of issues ending up in court, it is becoming more difficult to have a blanket ban on pets. Often, each scenario is increasingly being judged on a case-by-case basis. Having a proactive body corporate that acts immediately to inform new residents of the by-laws is one step that could be taken to avoid these expensive and emotional situations.

Even the best strata management company cannot solve these problems, so it is important that residents understand their agreements and responsibilities. WA Strata Management thoroughly trains their strata managers to ensure they don’t get caught in the middle of these disputes. Their website at www.wastrata.com has some information and downloadable guides to living in strata situations. The best way to avoid all this expense and unpleasantness is to be fully informed.

Why You Should Choose a Professional to Manage Your Strata Company

With the number of residential properties under strata title in Australia numbering the hundreds of thousands, you could be forgiven for thinking that by now, the general public would be well educated in the concept of strata title and the rules around it. However there are still many misconceptions and a general lack of knowledge about the rules and regulations that provide structure to the various activities involved in running a well-managed strata title scheme.

This is where the knowledge, experience and expertise of WA Strata Management become invaluable. WA Strata Management is an organisation specialising in providing professional strata title and body corporate management services to their clients. As members of the Strata Titles Institute of WA, the peak industry body representing people working in the strata title industry, they are bound by a code of ethics which provides assurance to their clients that they act with honesty, integrity and professionalism in all their business dealings.

Put simply, a strata title is the form of ownership devised when a property is divided into separate and individual dwellings (or business premises in the case of commercial property). The property owners hold separate title over their own lot and the common areas are owned collectively. As a lot holder, the owner automatically becomes a member of the strata company and as such, responsible for not just their own lot, but the whole complex as part of a collective. The members elect a Council or body corporate to represent them with duties and responsibilities set down by legislation.

This type of ownership has given rise to the establishment of companies such as WA Strata Management. With large complexes now housing sometimes hundreds of units with separate titles and different owners, the process of efficient management of the complex is almost impossible for the Council to perform themselves. Legislation gives the Council the power to appoint a strata management company and the authority, responsibility and accountability for the sound management of the complex can be delegated to a professional strata manager for an agreed fee.

WA Strata Management excels in this area, with staff trained in all aspects of managing strata companies and having detailed knowledge of the legislation, regulations, codes of practices and the reporting mechanisms they require. They provide advice to the Council and make decisions on their behalf regarding executive duties which, by legislation, are the Council’s responsibility. The day to day operational management of the facility is performed by the strata manager employed by WA Strata Management.

This arrangement works very successfully in most cases. Many unit owners are investors who live interstate or overseas, and are not interested in being involved provided their asset is looked after and their responsibilities and liabilities covered. The successful running of a large complex requires people with business administration experience and knowledge of financial accounting and management systems. WA Strata Management has excellent management systems which enable the strata manager to report regularly to the Council as required by legislation.

As the only local strata management company with full time, fully qualified strata title managers, it is really a no-brainer to choose WA Strata Management to assist your Council to discharge their legislative responsibilities. WA Strata Management will be happy to take your call and show you how they can assist your Council.

Get Strata Management Contracts Checked by Legal Professionals

There should always be two sides to any agreement for it to be effective and fair to both parties. This is true regardless of whether it is a written agreement or a verbal one. In the world of strata management, a written contract or agreement is essential, given the complexity of the legislation and the differing roles involved in strata title management.

When a person buys into a strata scheme for the first time, s/he may not fully understand the various roles people undertake to ensure the sound management of the complex. The Act recognises that in large schemes with many lots, it is not practical for every owner to become involved in the day-to-day management. It therefore allows for the strata company to be operated by a council of the owners.

Council May Arrange a Service Contract for Strata Management

The Council in itself may not be able to run the complex effectively, and may decide to engage a strata manager to act for them. Strata management can be performed by a company or an individual, and the role of the Council is then to instruct and monitor the strata manager. The arrangements are formalised in a service contract or agreement, with the responsibilities of both parties clearly defined.

It is important that all owners are advised of the appointment, and also given a clear brief of the role itself and the services to be provided by the strata manager. Statistics show that many disputes in strata schemes arise because individual owners try to give instructions and direction to the strata manager that are in conflict with the services agreed in the contract by the Council.

Council to Instruct and Monitor Strata Manager

It is the responsibility of the strata Council to monitor the performance of the strata manager, and to undertake those responsibilities which it retained and are not part of the service contract or agreement. Contracts with strata managers are often short-term, that is, twelve months. This is so the contract can be easily terminated if strata managers do not live up to their end of the agreement.

An objective examination of the performance of the strata manager may find that a poor score card is just a perception, and cannot be backed up by evidence. Before taking this step, the Council should check the contract first to see what services should be performed by the strata manager. They may find that either these were not part of the contract, or that the nominated Council representative did not inform the strata manager of the need to carry out certain duties.

Much of this unpleasantness could be avoided if, at the outset, the parties to the agreement had it checked by their legal representatives. It is essentially a contract of employment and as such, it is a valid legal document. If a dispute should go to court, the way the contract is worded could be an issue if it has not been reviewed by a trained legal person.

The strata title laws and regulations are very complex and, for this reason, Councils are increasingly using professional strata managers who have been trained for the role. A large complex can’t be effectively managed if individual owners are taking up the time of the strata manager by expecting certain tasks to be performed for them. They should be referred back to the Council and the service contract.

Time Pressed Customers Need 24/7 Service

One of the most important lessons successful companies and businesses have learnt is to listen to their customers and provide the goods and services that are important to them. Regardless of what we think they want, it is only through open communication with our customers that we as a business actually know for certain what matters to them.

Account Access now Online 24/7 for Customer Convenience

We have taken steps to understand our customers’ needs and the most pressing issue they talked about to us is the lack of time they have to get everything done in normal working hours. We thought about that, and how we could improve our service delivery and the obvious answer was to provide them with 24/7 account access. WA Strata Management customers can now access information at a time convenient to them and the feedback we are receiving has been very positive.

This is not the only service we offer our customers. We provide professional strata services to hundreds of strata councils throughout Western Australia. Our team are dedicated strata management specialists and are committed to supporting our client councils through our knowledge and management skills. Our aim is to make the day-to-day running of their strata schemes effortless so that every member can enjoy their property and common areas and leave the rest to us.

Manage Accounts and Access Information at Your Convenience

The success of the 24/7 online access hasn’t really surprised us. Rather than just offering a minimal service, we strived to create options that gave the members access to everything they would likely need to manage their accounts. Personal profiles, account details, balances and transaction history were the essentials our clients told us they wanted.

We also included strata plan details, bylaws and rules, as these can become points of conflict when members either don’t have ready access to check issues or have not thoroughly read and understood their terms. Minutes of meetings are also available now online, and we work hard to keep these updated along with any relevant notices. The online access also gives us an excellent vehicle to keep people informed through strata newsletters.

Website Protection Given Top Priority

Every eligible member is issued with a user name and password so they can be confident that their information is only available to them. Site security includes the use of a “captcha code” which ensures the user is human and acts as a barrier to bulk spamming by robot computers. We make every effort to update our web technology to keep this information safe.

Whether it is the proper set up of your strata development from the beginning, or the ongoing management of an existing scheme, we have the experienced staff and established systems that you need. We invite you to visit www.wastrata.com and see what we have to offer.